ECB does not plan to use emergency direct cash transaction

US, WASHINGTON (ORDO NEWS) — The European Central Bank does not plan to use an emergency direct cash transaction (OMT) program and considers it an inappropriate tool to combat the coronavirus crisis, two sources familiar with the ECB’s position said on Thursday.

An emergency OMT bond purchase scheme was developed at the height of the eurozone debt crisis and would allow the ECB to make unlimited debt purchases for a particular country.

Some officials in Brussels and the ECB argue for a program.

OMT, which has never been used, was designed to help individual countries overcome “traditional” debt imbalances or banking crises.

“The shock we are facing right now has nothing to do with what OMT was created for,” said one source who asked to remain anonymous.

“She is inappropriate in the current circumstances.”

The representative of the ECB declined to comment.

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